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3.0 ERMU MINUTES 03-10-2009ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM February 24, 2009 Members Present: Jerry Takle, President; John Dietz, Vice Chair; Jerry Gumphrey, Trustee Staff Present: Vance Zehringer, Interim General Manager; Theresa Slominski, Finance Director/Office Manager; Troy Adams, Engineering Manager; Mark Fuchs, Line Superintendent; David Berg, Water Superintendent; Judy McSpadden, Recording Clerk; Wade Lovelette, Richard Wagner, Michael Price, Adam Freiberg, Tom Geiser, Shane DeFeyter, Chad Grande, Kim Sandstrom, Angela Hauge, Lome Franz Others present: Lori Johnson, City Administrator; Attorney Peter Beck, Gray Plant & Mooty; Daryl Thompson, Incoming ERMU Commissioner 1. Call meeting to order February 24, 2009 President Jerry Takle called the February 24, 2009, meeting to order at 4:30 p.m. 2. Consider Utilities Agenda John Dietz added items to be discussed under Other Business. Jerry Gumphrey moved to approve the February 24, 2009, Utilities Agenda. John Dietz seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda Jerry Gumphrey questioned the need for Class 5 asphalt being placed at the Gary Street water tower. David Berg responded it was necessary because of the construction in the area the driveway has become unusable. John Dietz questioned the financials and the CAPX2020 disbursement, Theresa responded. John Dietz said he would like the disbursement amortized over 12 months instead of one year end entry. Jerry Gumphrey moved to approve the Consent Agenda as follows: January Check Register January 13, 2009, Minutes Financial Reports John Dietz seconded the motion. Motion carried 3-0. Page 2 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 5.1 Staff Up -dates Vance Zehringer reported January sales of electric up 9.8% and water up 8.6% from a year ago. Search continues for wholesale power supplier. All potential wholesale power suppliers have asked for confidentiality as applies to rate information. Connexus has requested Elk River Municipal Utilities (ERMU) sign a Confidentiality Agreement prior to discussing any type of rates. The annual report will be discussed at the next City Council meeting on March 2"d. Vance briefed the Commission on the points of interest in the annual report to the Elk River City Council. John Dietz said he was planning on being at the meeting also. Lori Johnson said Attorney Peter Beck has reviewed the Confidentiality Agreement from Connexus. Attorney Peter Beck informed the Commission that any reference to the City of Elk River should be omitted from the Confidentiality Agreement. John Dietz moved to authorize Vance Zehringer to sign the Confidentiality Agreement with Connexus after the wording City of Elk River has been replaced with ERMU. Jerry Gumphrey seconded the motion. Motion carried 3-0. Theresa Slominski updated Commission on the performance report for the Landfill Gas Recovery plant. Capacity factor for the plant in 2008 was above 99%, qualifying them for a $20,363 bonus. An agreement with Sherburne County upon completion of the 4d' engine at the Landfill was a bonus payment in lieu of interest for $12,000. Vance will be presenting this to the Sherburne County board in March. The year end inventory comparisons for the last three years were discussed. An issue occurred regarding a customer dropping off their payment in the drop box in front of the office. The customer was dissatisfied with the day the payment was posted. The drop box does not have proper lighting and does not have a camera for verifying when a payment was dropped off. Staff has secured a bid for installing proper lighting, which is the same lighting as the police department, and adding a camera to the existing security system. The cost for the equipment and installation is $2000. Jerry Gumphrey asked how it would be paid for. Theresa responded it would be paid out of the miscellaneous equipment fund. Jerry Gumphrey moved to approve purchasing the camera and new lighting for the drop box in front of the office. John Dietz seconded the motion. Motion carried 3-0. David Berg said the Earth day Expo will be held in April at the Twin Lakes School. ERMU will have a display and water operator Angela Hauge will be there to hand out information and answer questions. The yearly water quality report is due to customers by July. Some samples were presented differing form the previous form used. The cost associated with the new version of the report is approximately $1000, but could be more informative to the customer. John Dietz asked Lori Johnson if this report form could be included in the City of Elk River's newsletter instead of a separate mailing to the customer, Lori Johnson affirmed. John Dietz directed David Berg to check on the cost, and report back at the March ERMU Commission Page 3 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 meeting. Water meters are being updated with the radio read. Some customers are difficult to get a hold of. Numerous calls and letters have not received a response. Some of the accounts have had estimated water billing for the past year because of problems with the meter. Staff is asking for direction in this matter. Attorney Peter Beck recommended adding to the Ordinance to treat it like a delinquent account. Jerry Gumphrey stated after the 3`d notice, ERMU should shut the water off. Consensus of the Commission was for David to work with Attorney Peter Beck and Troy Adams to incorporate this into the Ordinance. Mark Fuchs updated Commission on the recent activity in the electric department. The permanent electric service has been energized for the Metal Craft building on Business Center Drive. The faulty regulator on County Road 30 has been repaired and is back in service. Staff continues with the tree trimming, cutout replacement, and fuse change outs. Recently some guy wires were moved for Sherburne County off County Road 30 that were too close to the road. The electric line truck previously ordered from Dueco should be delivered in April. The City of Elk River staff is currently performing the DOT inspections and maintenance on ERMU vehicles. Vance informed commission that Connexus is now repairing transformers. This will be beneficial savings to ERMU. Troy Adams reported 12 security sales in the month of January. Locates are still down so the locators have been assisting with tree trimming and working on mapping. A new thermal imaging camera recently purchased has been beneficial in discovering hot spots that need maintenance. Previously GRE would perform this service for us. Staff continues to replace old meters with the new radio read. Troy updated Commission on the correspondence with another Data Processing Center interested in relocating to this area. The two substation transformers that were leaking have been repaired. A recent black start walk through was performed at the generation facility. The Anoka Tech versus the MMUA safety program was discussed. Staff is in the process of planning a Workplace harassment training seminar partnering with the City of Elk River. In the near future cable bids will be sent out for the projects scheduled this year. MMUA's winter convention will be coming up in March at the Capital and has strongly suggested someone from ERMU appear. Vance Zehringer commented he could go. Jerry Gumphrey asked incoming Commissioner Daryl Thompson if he could also go, Daryl responded yes. Lori Johnson needed to clarify for the City Council meeting on Tuesday, March 2"d that if John Dietz was going to appear, there would be two Commissioners present at the meeting therefore it would be considered a joint meeting. John Dietz moved to authorize a Special Meeting Monday, March 2, 2009, at 6:30 at City Hall. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.2 Approve Revised Policies At the January ERMU Commission meeting the final draft policies were distributed. They have been reviewed by staff with some minor clarifications/changes and sent back to Page 4 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 Gray, Plant, & Mooty for their review. A revised copy of the policies was distributed. Staff is recommending approval of the final draft of policies as presented. Jerry Takle said he would like computers added to the list of equipment accounted for in the Inventory section of the policies. John Dietz moved to approve the policies as presented with the change in Inventory section 5 to include computers. Jerry Takle seconded the motion. Motion carried 3-0. 5.3 Consider Met Council Antenna Contract A copy of the Met Council Contract was reviewed. It is for the express purpose of adding communication in and on the Gary Street water tower. This equipment will be used by North Star Commuter Rail for communication. Theresa Slominski, Troy Adams, and Vance Zehringer updated the Commission on the other Cities that have been contacted to contract with the Met Council. Attorney Ron Black does not recommend signing this contract as is. John Dietz recommends ERMU be cooperative in this matter. David Berg said a water operator would have to be present if they needed to get into the tower. Jerry Gumphrey commented he thinks ERMU should charge extra if after hours. David also said he is concerned how the equipment would be mounted so it wouldn't damage the integrity of the tower and in another five to six years the tower would need to be painted and the equipment would have to be moved. Consensus was to renegotiate the contract and return for Commission approval. 5.4 Discuss Disposition of Jackson Street Water Tower ERMU has given the Heritage Preservation Commission until September 2009 to come up with a plan to save the Jackson Street water tower. Another visual examination of the structure was made showing some corrosion, but the concrete footings appear to be in good shape. The lab results previously performed on the tower show the presence of lead based paint. The initial cost estimate to touch-up or completely repaint the tower was $25,000 to $50,000. Because the lead based paint is considered hazardous material, the tower would have to draped, sand blasted to the bare metal, and the paint disposed of as hazardous material. The current estimated cost to restore the Jackson Street water tower is $128,000. ERMU has budgeted $35,000 for demolition. Discussion followed regarding the possibilities of changing ownership and the need to make a decision at this time. David Berg said the paint should last another three years. John Dietz said as long as the paint can last a few more years and the tower is structurally sound, he would like to hold off making a decision at this time. John Dietz moved for staff to acquire bids from engineering firms to analyze the structural integrity of the water tower inside and out. Jerry Gumphrey seconded the motion. Motion carried 3-0. Page 5 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 5.5 Review Fuel Card Reader (Gas Boy) Quote At the December 9, 2008, ERMU Commission meeting, the vehicle maintenance system the City of Elk River utilizes was discussed. A quote from Zahl-PMC for a gasboy fuel management system was discussed. Staff was directed to acquire the cost of implementing this system and return for approval. Mark Fuchs presented the costs associated with this installation. John Dietz moved to approve the purchase and installation of a used gasboy series 1000 fuel management system for $9000. Jerry Gumphrey seconded the motion. Motion carried 3-0. Mark Fuchs also discussed the conversation he had with Lori Johnson and Tim Simon regarding purchasing diesel in bulk through the City's contract. This will be revisited at a later date. 6.1 Consider Emergency Shutoff Ordinance At the last ERMU Commission meeting, staff was directed to develop a policy and procedure for water shutoffs in abandoned homes. A policy and procedure for water shut -offs was reviewed. Also reviewed was a City Ordinance called Discontinuance of Water Service, providing certain rights and responsibilities to assure water is shut off in an expedient manner when homes are abandoned or are in danger of flooding as a result of the electric or gas services being turned off. Attorney Peter Beck explained some recommended changes to the Ordinance. Jerry Gumphrey moved to approve the Discontinuance of Water service Ordinance to be presented to the City Council with the recommended changes. John Dietz seconded the motion. Motion carried 3-0. 6.2 Consider Policy for Antennas on Water Towers No policy was presented at this time. Staff will revisit this at the next regularly scheduled ERMU Commission meeting. 6.3 Consider Policy on Mutual (Emergency) Aid for Electric & Water Due to natural disasters, massive equipment, structural failures, or other catastrophic events, there may be a time when ERMU is in need of assistance from outside resources to restore water or electric utilities and re-establish public safety. Likewise, ERMU may be called upon by other utilities to provide the same services outside ERMU's service territory. Due to the timing, it may not be possible to propose such a request to the Utilities Commission Page 6 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 at a regularly scheduled ERMU Commission meeting. ERMU's unwritten policy regarding mutual aid is to provide resources at management discretion. Typically the request for such aid would be generated through an organization such as Minnesota Municipal Utilities Association but could come directly from a utility or city. Troy Adams recommends the following proposed written policy. Mutual Aid Policy In the event of a natural disaster or catastrophic event resulting in the compromise of water or electric utilities outside Elk River Municipal Utilities' service territory, Elk River Municipal Utilities may be contacted through utility associations, utility companies, or cities to provide assistance. This request for assistance may be that of labor and/or equipment resources. At the discretion of the Utility Management, resources may be dispatched in such a way as to not compromise Elk River Municipal Utilities or their customers. John Dietz moved to approve the Mutual Aid Policy as presented. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.4 Consider New Raw Water Main (Well #9 to Well #7) The Minnesota Department of Health (MDH) recently sent an e-mail stating ERMU's water department qualifies to apply for a Revolving Fund Loan, which is part of the stimulus program. ERMU would qualify for this loan because of the high iron and manganese levels in the water at the newly constructed Well #9. This would be a 30 year loan for low or zero interest. The project would entail running a water main from Well #9 to the water treatment plant at Well #7 for an estimated cost of $350,000. Details and specs will be presented at a future meeting. John Dietz moved to put in a bid for a stimulus loan for constructing a water main from Well #9 to the water treatment plant at Well #7. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.5 Discuss Staff Restructuring At the January ERMU Commission meeting, staff was directed to consider changing the organizational structure of the Utilities. The proposed restructuring would be to not hire a General Manager. Instead, the existing staff would be utilized to meet the company needs through promoting from within, restructuring job duties, and reallocating responsibilities, including the Water Superintendent reporting to the City of Elk River. Discussion followed regarding the changes staff is recommending. The staff's first recommendation was to hire a General Manager. The second option of not hiring a General Manager would have limitations even with some restructuring and job duty reallocation. The restructured organizational chart Page 7 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 of option two was reviewed. When asked, John Dietz commented that these positions would not need to have job postings but Commission could go off the recommendations by staff. John Dietz proposed Troy Adams would be promoted to oversee the Utilities with a title, Director of Operations. Other promotions would also be involved to facilitate the restructuring including a new supervisor of technical services, new crew foreman, and a new inventory foreman. Commission and staff discussed the relationship between City Public Works Director, Water Superintendent, and the Utilities. John Dietz responded that the City Public Works Director would consult and recommend but not be directly responsible for setting rates and budgeting, those would be the responsibility of the Water Superintendent. Jerry Gumphrey commented that Troy should still be involved in the reviews because they are still Utilities employees. John Dietz suggested an April I' implementation with staff filling out the job description questionnaire after 60 days for Riley, Dettman & Kelsey to review for job points and salaries with retroactive pay back to April I". John Dietz moved to approve the recommended staff restructuring effective April 1, 2009. In conjunction with this restructuring, the City Attorney will prepare a memorandum of understanding between ERMU and the City of Elk River that provides for the City's Public Works Director to be the direct supervisor of the Water Superintendent and for the Public Works Director to assist with various functions in the Water Department including input on water projects, water budgets, and water rates. The memorandum is subject to approval by both the Elk River Utilities Commission and the Elk River City Council. Jerry Gumphrey seconded the motion. Motion carried 3-0. Vance Zehringer was hired as interim General Manager for up to a six month period. This will expire as of the beginning of May. Vance suggested working in this capacity to near the end of the six month term to finish work begun to find a wholesale power supplier. Consensus was to extend the contract to April 24, 2009. Other Business John Dietz distributed a Shared Personnel Agreement from Attorney Mark Mathison of Gray Plant & Mooty regarding the HR person. John Dietz moved to approve the Shared Personnel Agreement for City Council approval. Jerry Gumphrey seconded the motion. Motion carried 3-0. John Dietz suggested a limit should be set for future purchases over a certain amount that would need Commissioners approval prior to ordering. This will be discussed further at the next regularly scheduled ERMU Commission meeting. Page 8 Regular meeting of the Elk River Municipal Utilities Commission February 24, 2009 John Dietz reiterated his previous comments regarding layoffs, that there will not be any. If the situation arose the work week would be cut to 36 hours for all departments. Staff was directed to look into the work load to see if the Utilities should consider doing this at this time. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, March 10, 2009, at 4:30 p.m. Jerry Takle thanked everyone for the opportunity of being a Utilities Commissioner for the past six years. Jerry Takle introduced Daryl Thompson, the newly appointed Utilities Commissioner. Vance Zehringer thanked Jerry Takle for his years of service. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 6:45 p.m. Minutes prepared by Judy McSpadden. President, ERMU Commission Tina Allard City Clerk